It pays to split your customers

May 2012

Customer segmentation is essential before undertaking any form
of B2B customer satisfaction
survey or customer research. As
the findings of the customer research
often inform decisions at a strategic level including advertising,
marketing and communications, getting a real understanding of your
audience demographics at this point is critical for long term brand
success.

What is customer segmentation?

Segmentation is a simple methodology that ensures your customer survey is
asking the right person, the right questions, using the right
methodology.

At its simplest form, customer segmentation is a way of dividing
people into sub-groups which share certain characteristics. These
might include:

total spend with your organisation

proportion of a customer's spend with you (share of
wallet)

frequency of service usage

means of purchase, etc.

By segmenting your customers, you will maximise the insight you
will gather from them and maximise the business value you will gain
from your customer survey
project.

Relevance of segmentation to your customer survey

Customer segmentation enables organisations to design and tailor
their service offering or product to meet the needs of specific
groups. This is because certain sub-groups may have similar
behavioural patterns or needs from their service provider.

If discreet groups have not been identified prior to survey
design, then your customer
questionnaire may fail to provide the right type of answers, or
may not relate to your customers very well.

There are different types of information your customer surveys can
provide such as comparisons between price, performance or service.
You may also be interested to compare your organisation's
performance against competitors. Failure to conduct proper customer
segmentation may lead to inappropriate comparisons which would
provide data of little relevance.

Maximise customer survey effectiveness

Many of Insync Surveys' professional services clients report
that over 60% of their revenue comes from just 20% or less of their
clients. The next portion of their clients spend significantly less
with lower frequency.

Simply, these groups of clients should be treated differently in
the survey, analysis and reporting phases of the customer satisfaction
survey.

A customer survey segmentation model

Linking the segmentation approach to brand advertising and
marketing

Experience tells us that most B2B organisations survey customer
satisfaction on an irregular and sometimes ad hoc basis. However,
marketing and advertising activities tend to be ongoing.

If ongoing commercial strategies and spend are informed by
infrequent, ad hoc and sometimes inconsistent customer survey
methodology, it's essential when running your customer
survey that you have a clear understanding of which group
of customers you are speaking to and what you want to know.

Using online customer surveys for the masses

An online customer
survey can be deployed to all of your customers. This is the
most common form of customer survey that
we run with excellent results. It is important that we still
segment the client base prior to deciding to use an online survey
as the customer base is still the key point to consider.

Case study: A
motor company recently chose to launch their customer satisfaction
survey in paper form. They understood from grouping the
demographics of their customers that they would be more likely to
open and respond to mailed customer surveys with a charitable
incentive for completion, than access an online customer
survey.

This worked very well in terms of completion rates by reaching
their key customer group with a survey method they were comfortable
and familiar with. An online customer
survey would not have been the most effective method in this
case.

Telephone surveys for your "top" customers

Telephone interviews may be the most appropriate way to contact
your "top" customers who make up the top 20% of spenders. This can
be a cost effective method for securing a high rate of customer
survey participation. Similarly, telephone interviews may be
appropriate for audiences including:

lapsed customers

customers for whom you have a specific question, or

to dig deeper and validate your customer feedback

In depth interviews to gain insight post-customer survey

In depth interviews are a good way to gain deeper insights or to
flesh out hypotheses prior to or post a large-scale customer survey.

Case study: A
property specialist recently asked Insync Surveys to conduct six
interviews with representative individuals from their segmented
group of top 50 clients.

The findings helped to explain some of the online customer
survey results, particularly with regard to predictions of
future spending behaviour and brand advocacy. Furthermore, they
also provided clear and specific insights into actions the
organisation could take to better service these clients and
position themselves as the supplier of choice every time, not just
in some circumstances.

How Insync Surveys can help

Insync Surveys works closely with clients to understand their
customer segmentation and customer survey
requirements. We have strategies to conduct customer research with
different segments of customers while still providing a
comprehensive overall picture of results.

For more information about segmenting your customers please
contact us.